The undersigned, acting on behalf of the Board of Directors pursuant to delegated authority, has fully considered all available facts and information relevant to the factors of Section 6 of the Federal Deposit Insurance Act and relating to the application for Federal deposit insurance with membership in the Bank Insurance Fund for Department Stores National Bank, a proposed new limited-purpose credit card national bank to be located at 701 East 60th Street North, Sioux Falls, South Dakota, and has concluded that the application should be approved.

Accordingly, it is hereby ORDERED that the application submitted by Department Stores National Bank for Federal deposit insurance be, and the same hereby is, approved subject to the following conditions:

1. That beginning paid-in capital funds of not less than $29,000,000 be provided;

2. That the Tier 1 capital to assets leverage ratio be maintained at not less than eight percent throughout the first three years of operation and that an adequate allowance for loan and lease losses be provided from the date insurance is effective;

3. That any changes in the proposed management or proposed ownership of ten percent or more of stock, including new acquisitions of or subscriptions to ten percent or more of the stock be approved by the FDIC prior to opening;

4. That prior to the effective date of deposit insurance, adequate fidelity coverage be obtained;

5. That deposit insurance shall not become effective until the applicant has been granted a charter, has authority to conduct a banking business, and its establishment and operation as a depository institution has been fully approved by the Office of the Comptroller of the Currency;

6. That until the conditional commitment of the FDIC becomes effective, the FDIC retains the right to alter, suspend, or withdraw its commitment should any interim development be deemed to warrant such action; and

7. That if Federal deposit insurance has not become effective within one year from the date of this ORDER, or unless, in the meantime, a request for an extension of time has been approved by the FDIC, the consent granted shall expire at the end of the said time period.

Pursuant to the provisions of Section 5 of the Federal Deposit Insurance Act (12 U.S.C. § 1815), an application for Federal deposit insurance has been filed for Department Stores National Bank (the Bank), a proposed new limited-purpose credit card national bank to be located at 701 East 60th Street North, Sioux Falls, South Dakota.

The Bank will be a limited-purpose credit card bank and a direct subsidiary of Citibank NA, New York City, New York. The Bank is organized to facilitate Citibank, NA's acquisition of Federated Department Stores, Inc., (Federated) credit card business and certain credit card portfolio assets of FDS Bank, a federally chartered stock savings bank and an indirect subsidiary of Federated. The Bank will focus on managing and issuing private-label and general-purpose credit cards using logos owned by Federated. In addition to formal written operating policies, the Bank will ensure that all transactions with affiliates are arms length and within regulatory statutes and guidelines.

The Bank will operate from a single office that will not offer traditional deposit-taking facilities. Liabilities will consist of time deposits and other liabilities. Time deposits will be comprised of cash collateral from Citigroup to comply with Section 23A of the Federal Reserve Act.

For the purposes of this proposal, capital is adequate, projections for future earnings prospects are favorable, management is considered satisfactory, and the investment in fixed assets is reasonable. Corporate powers to be exercised are consistent with the purpose of the Federal Deposit Insurance Act. No undue risk to the insurance fund is apparent. Formal objections to this proposal have been thoroughly assessed and found not to constitute a sufficient basis for denial of the application.

Accordingly, based upon careful evaluation of all available facts and information, the Associate Director, acting under delegated authority, has concluded that approval of the application is warranted, subject to certain prudential conditions.